ATHENS: Greece sought Sunday to calm fears of further austerity, after Germany's finance minister raised the prospect of a third rescue package for the struggling nation.

German Finance Minister Wolfgang Schaeuble said in an interview published Sunday that "it's possible that Greece might require further aid, of a limited amount".

"It would be significantly lower than the two previous rescue packages – meaning no more than €10bil (US$13.6bil)," he told Focus magazine.

His comments fanned fears that the Greek government would be forced to impose further tough reforms including job and wage cuts in exchange for the aid.

Greece's radical leftist party Syriza, which won the European elections on an anti-austerity ticket, said Schaueble's comments pointed to "new measures" that would "exhaust people".

But the Greek finance ministry said the country had no immediate need of extra help.

"The financing needs of our country are covered as everybody knows and Eurogroup acknowledges, until the end of the first semester of 2015," it said in a statement.

"For the 2015-2016 period, our country's financing needs will depend on the results of the bank tests conducted by the European Central Bank", it added.

Greece has been rescued from bankruptcy by the International Monetary Fund, the European Commission and the European Central Bank with two bailout packages totalling €240bil (US$331bil).

In exchange, Athens was forced to undertake drastic reforms including wage, pension and job cuts to bring down its runaway public deficit.

The International Monetary Fund released the latest tranche of US$4.6bil in aid funds to Greece on Friday, after a year-long delay to ensure Athens was meeting targets set by bailout lenders.

The Fund said the Greek government had surpassed targets on closing its budget gap, but warned of a number of challenges still facing the country in fully stabilising its finances and returning to sustainable growth.

According to Schaeuble, Greece's debt, equal to 175% of GDP, will not fall to a sustainable level before 2022. – AFP

SEOUL: South Korea's manufacturing activity fell to a nine-month low in May as new export orders shrank, a private-sector survey showed on Monday, adding to signs of a softening recovery in Asia's fourth-largest economy.

The HSBC/Markit purchasing managers' index (PMI) of South Korea's manufacturing sector slid to a seasonally adjusted 49.5 in May from 50.2 in April, Markit Economics said in a statement.

The May reading was the lowest since 47.5 in August 2013.

A reading below 50 means activity shrank during the month. The index was just above 50 in March and April.

A sub-index for new export orders that South Korean companies received during the month fell to 49.4 in May from 49.9 in April. The May reading was its lowest since September 2013. – Reuters

BEIJING: China's factory activity expanded at the fastest pace in five months in May due to rising new orders, official data showed on Sunday, reinforcing views that the world's second largest economy is regaining momentum in the second quarter following Beijing's targeted measures to bolster growth.

The official Purchasing Managers' Index rose to 50.8 in May from April's 50.4, the National Bureau of Statistics said on Sunday, beating market expectations of 50.6.

"The PMI reading continued to improve in May, indicating that a trend of economic stabilization is becoming more evident," Zhang Liqun, a researcher at the Development Research Centre said in the statement accompanying the data.

As one of the first leading indicators gauging economic momentum, the improved reading could bode well for other May data, bolstering market expectations that the economy is regaining some strength as the government's pro-growth measures started to kick in.

The official survey showed a broad-based recovery in manufacturing activity in May, with nine out of the 13 sub-indicies pointing to improvement from the previous month.

A sub-index for new orders, a measure of foreign and domestic demand edged up to 52.3 in May from 51.2 in April, marking the highest level since last November.

The PMI data also showed export orders inched higher to 49.3 in May from 49.1 in April, though the indicator remained below the 50-level threshold that separates growth from contraction.

POLICY SUPPORT

Beijing stepped up policy fine-tuning in recent weeks and has unveiled a slew of targeted measures this year to help shore up the economy, which has dipped to a 18-month low in the first quarter and is seen on track to post the weakest annual showing in 24 years.

"It is clear that the government has become more concerned about the continued economic slowdown and wants to further increase the strength of policy support," said Wang Tao, economist at UBS in a note to clients.

China's cabinet announced fresh easing measures on Friday to help lower funding costs and reduce operating burdens for companies to give more support for the real economy.

The measures included lowering the reserve requirement for more banks, increasing the scale of re-lending and bond financing to support smaller firms, and a further reduction of administrative fees for businesses.

China's finance ministry had also urged their local branches to quicken the pace of budget allocation to guarantee the completion of key projects and lift the slowing economy.

Those policy moves, together with the earlier steps, such as hastening construction of railways and public housing, tax cuts for smaller enterprises, have combined to give a boost to the economy, though officials and economists warned that the downside pressure still exists.

Chinese leaders have ruled out the possibility of any big fiscal stimulus to spur economic growth as they tolerate a slower growth rate while pushing ahead with structural reforms.

China has set an annual target for the economy to grow about 7.5% in 2014 and a Reuters poll found that economists expected growth of 7.3% for this year.

A preliminary HSBC/Markit PMI issued late last month showed the factory sector turning in its best performance in five months, although the reading remained below the 50-point level that suggests contraction in manufacturing activities.

All eyes now will be on the release of the final HSBC PMI at 01:45 GMT on Tuesday, which favours smaller and private companies compared with the bigger ones captured by the official PMI. – Reuters